Update: Nestle Closing Chatsworth Plant

Nestle USA announced on Tuesday it is shutting down its Chatsworth plant that manufactures Hot Pockets and will move the operation to an expanding facility in Mt. Sterling, Ky. Up to 360 workers could lose their jobs.

The Glendale-based unit of Swiss food giant Nestle SA has manufactured the sandwich meals at the 9601 Canoga Ave. plant since 1988 but is investing $13 million in its Mt. Sterling facility to convert the operation to a 24-hour schedule. The company informed its Chatsworth employees of the decision on Friday.

The Glendale food company acquired the Hot Pockets and Lean Pockets brands in 2002, and has continued to grow at a pace that the 184,000 square-foot Chatsworth location could not sustain, said Nestle spokeswoman Roz O’Hearn.

“Because of its placement in an industrial park surrounded by other businesses, that placed physical constraints on our opportunity to grow it for the future,” she said

However, the company laid off more than 100 workers at the plant in 2012 due to slower sales. The plant will likely halt production in early October, if not sooner.

Nestle began its search for new employees in Mt. Sterling this summer and expects to hire on about 150 employees by October, making its employee count about 1,250. The company said it will help the employees in Chatsworth transition, which might include some employees relocating to Kentucky.

The Kentucky facility opened in 1993 and doubled in size three years later to its current space of 350,000 square feet. O’Hearn said it will be able to accommodate future growth for the Hot Pockets brand, which has seen success under Nestle in the past 12 years, though the company would not disclose recent sales figures.

“At the Kentucky facility, we will be able to operate at high levels of efficiency to deliver very good value to the consumer,” O’Hearn said.

The company has not yet determined if it will sell the Chatsworth property.

Martial Genthon, Nestle USA’s chief technical officer, said in a statement that the decision came after “exhaustive analysis.”

“Unlike other manufacturing facilities we operate in California, the Chatsworth facility presents some challenges to our business needs,” he said. “Consolidating to one location will allow us to further improve our level of performance.”

Stuart Waldman, president of the Valley Industry and Commerce Association, a Van Nuys business advocacy group, said the layoffs should serve as a wake up call to elected officials to improve the state’s business climate.

“It’s a tragic situation. It’s going to drastically impact the economy of the San Fernando Valley, but it sends a clear message that California is bad for business,” he said. “It’s imperative that we call on our elected officials to fix this situation. We have the most business-unfriendly state in the country.”